State Support for Entrepreneurship in Azerbaijan, 2020–2025: Policies, Programs, and Outcomes

Abstract

Small and medium-sized enterprises (SMEs) are increasingly recognized as pivotal to Azerbaijan’s economic diversification and regional development. This article analyzes the state-led support mechanisms for entrepreneurship in Azerbaijan, particularly those expanded since 2020. Drawing on government reports, international assessments, and academic literature, the study examines financial support programs, legal and regulatory reforms, the establishment of SME Houses and the “SME Friend” network, startup incentives such as Startup Certificates, grant financing schemes, and innovation support measures. The coordination of these efforts through dedicated public institutions is discussed, alongside measurable outcomes such as growth in the SME sector’s contribution to GDP and employment, increases in new business registrations, and high utilization of one-stop services. International cooperation initiatives—including partnerships with the OECD, the International Trade Centre (ITC), and Turkey’s KOSGEB—are also explored for their contribution to capacity building and the exchange of best practices. The findings show that Azerbaijan’s government has significantly expanded support for entrepreneurs in recent years, yielding double-digit growth in the SME sector and improved service delivery. Nevertheless, challenges such as access to finance and regional disparities remain. The article concludes with an assessment of institutional support structures for SME development and recommendations for sustaining momentum, emphasizing continued policy innovation, systematic monitoring of support outcomes, and deeper public–private collaboration to ensure the long-term sustainability of entrepreneurship-led growth in Azerbaijan.